In what sense does the IMF act as a lender of last resort? How might the IMF's actions during the Mexican crisis of the mid-1990s have contributed to the Asian currency crisis a few years later?
What will be an ideal response?
The IMF acts as an international lender of last resort in the sense of making short-term loans to governments that lack the international reserves necessary to support the exchange value of their currencies. Some economists argue that the existence of the IMF introduces significant moral hazard into the international financial system. Some argue that the IMF's bailout of foreign lenders during the Mexican crisis encouraged risky lending to East Asian countries, which contributed to the Asian currency crisis.
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In order to maximize its profit, a single-price monopoly always produces output in the inelastic range of the demand for its product
Indicate whether the statement is true or false
Which of the following statements is false?
A) A corporate bond typically has face value of $1,000. B) Corporate bonds typically sell for a price that is equal to the bond's face value. C) The interest that corporate bonds pay is fully taxable. D) State and local governments issue municipal bonds.